Who is the beneficiary? You may have heard this word in the news on television or in the movies. However, this term itself is not popular enough, even taking into account the features of the development of the economy, business and entrepreneurship, as well as the era of the Internet.
We will try to answer the question of who the beneficiary is, as much as possible. It is worth highlighting some details, since the word has several meanings, and therefore there are some difficulties with their definitions, for example, in the fields of business and law.
Term
The word itself beneficiary has French roots (from. benefice - income, profit) and translates as beneficiary. It is possible that it also came from English benefit, which translates as wealth. In any case, the context is related to the monetary sphere and values.
Definition
In the broadest sense, the beneficiary is a person who owns and benefits from some valuable property, for example, by transferring his property for use. The nature of the values in this case can be completely different: real estate, transport, securities, production facilities and other assets. The simplest example is the landlord of an apartment: very often people who rent real estate are called rentiers. It also includes sublease, that is, the removal of real estate in order to lease it at a higher price.
However, the term beneficiary There are other areas of application, as it is used in many areas related to law and economics. In particular, insurance, brokerage services and business. This will be discussed in more detail.
Why could you not hear about this term
Despite such logical things as the spread of the Internet, the emergence of many different portals and sites dedicated to law, economics and business, the word itself beneficiary rarely used.
The most commonly used words are, for example, the founder of the business, the landlord, the owner, the owner, however, the described term is almost never used and is highly specialized. The reason is that this foreign word is unusual, and also has many synonyms and similar context expressions, examples of which you can see above.
The wider dissemination of the word to which this article is dedicated occurred with the appearance of the wording of the federal law, which entered into force on December 21, 2016, which obliges legal entities to disclose information about beneficiaries. This innovation will be discussed later, after covering some facts.
Who can be the beneficiary
Beneficiaries can be both legal entities and individuals. An example is the owners of production facilities, vehicles and premises that are rented out and used by enterprises.
However, this terminology is used in various fields: even despite a similar meaning, the meanings may vary slightly, depending on the context, which may lead to misunderstandings and difficulties. The following are the most common examples from various fields where the described term is widely used.
Insurance companies
In the insurance sector, the beneficiary is a person who may qualify for payment. It is important to note that this is not necessarily the owner of the insured property. For example, the beneficiary may be a bank.
If we are talking about life insurance, the beneficiary can be not only the insured person, but also, for example, the spouse or heir.
Lending
In the credit sector, the above mechanism is called a bank guarantee. It implies a tripartite agreement in which the bank will be the beneficiary and will receive payment from the insurer (guarantor) upon the occurrence of a corresponding case with the client. This practice allows you to reduce various risks associated with non-repayment of debt in connection with accidents and other negative factors that may affect the borrower.
In general, there are many nuances and peculiarities in this area, for example, in accordance with the Civil Code, the guarantor may refuse to satisfy the beneficiary's demand for payment in cases stipulated by law. For example, it can be obvious violations of the conditions for providing a guarantee, problems with some documents, etc.
Federal Law "On Combating the Legalization (Laundering) of Criminally Received Incomes and the Financing of Terrorism" of 07.08.2001 N 115-ФЗ
This normative legal act and its latest revisions contain a clause whose meaning is that legal entities are obliged to provide state bodies with information about beneficial owners. Even based on the title of this normative document, it can be concluded that the purpose of the changes is to counteract various crimes and offenses.
A sample list of data includes:
- passport data;
- address;
- TIN (if any);
- citizenship information, document confirming the legality of stay in the country (for foreigners).
Information about the beneficiaries can be requested not only by government agencies, but also by banks and credit organizations. There are special forms and forms for this, in addition, some data can be specified by requesting additional documents and information.
The responsibilities of legal entities include the collection and storage of information on beneficial owners, as well as documentary evidence of the information received. In addition, legal entities must update the information received about the beneficiaries once every 12 months. Information is stored for 5 years after receipt.
Data collection is carried out by means of inquiries regarding the participants of the company, who are obliged to provide the information they have. Authorized state bodies and credit organizations are entitled to receive such information. A document that contains such information is called a "Beneficiary Certificate" and contains information about the owners.
Relevant forms and forms in which owners are indicated can be found in various sources. In addition, they are often present on the official websites of banks and credit institutions.
Beneficial owner
This term has a more precise meaning, as it appears in the above federal law and is more clearly specified. We are talking about such persons who have real power in making various decisions in firms through ownership of shares (more than 25%) in the authorized capital. Key actions can be carried out both directly and through third parties concerned.
An example is the founders of organizations, holders of large share holdings (in the case of joint-stock companies), as well as participants with a large share in the capital of enterprises.
In addition, federal law has an interpretation of the term beneficiary. The latter refers to the entity that receives income from the activities of the company.
Thus, beneficiaries of a legal entity are entities that have more than 25% of the assets of the enterprise and the ability to make decisions, and beneficiaries are individuals who profit from the activities of the company, for example, on the basis of various agreements, commissions, etc.
Ultimate beneficiary
This term refers only to an individual. This is the true owner of any company. If you do not delve into complex constructions and legal terms, but give a brief description, you can use the simplest example.For example, there is a limited liability company that makes a profit due to the fact that it is the founder of another organization. In turn, the owner of the first company will be the ultimate beneficiary, as it can benefit from the activities of several enterprises.
Thus, this definition describes the individual who has the most influence and the largest share among the participants in the organization.
The rights
If we consider the beneficiaries as founders, participants and shareholders, then the opportunities will be fairly standard. These include such opportunities as managing your assets, controlling the work of the organization’s management, participating in meetings, making decisions in accordance with your shares, making a profit, dividends. It is very important to document activities and enter into agreements related to the management of property or securities.
Summary
Thus, we answered the question of who the beneficiary is. In a general sense, it is a person who has any sources of income that can be represented in completely different forms: securities, real estate, various production capacities, etc.
To summarize, we can conclude that recent changes in federal law oblige legal entities to disclose beneficiaries. The latter, in turn, are required to provide the necessary information. In addition, data can be collected by various banking institutions and credit organizations.
This legislation can contribute not only to the prevention of offenses, but also protect the beneficiaries themselves, as it involves fixing transactions and operations on a contractual basis, which can become a pillar in protecting the rights of owners and founders.
In addition, the above federal law contains the most accurate legal definition of who the beneficiary is.
It is important to note that the article is only informative and exploratory in nature: the above information may be changed in accordance with applicable law and future amendments.
If the reader needs more data, then it is better to study the federal law specified in the article on your own or to seek the help of qualified lawyers.